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The Japan Automobile Manufacturers Association, which represents Honda, Toyota, Mazda and other Japanese brands, warned the tariffs would have a damaging effect on the U.S. economy and consumers. | Yuri Kageyama/AP Photo

GM joins vociferous opposition to Trump’s auto tariff push

General Motors lent its voice Friday to the growing uproar among major U.S. businesses and agriculture groups attempting to stop President Donald Trump’s plan to slap 25 percent tariffs on foreign cars.

In comments filed with the Commerce Department, the automaker warned that steep new duties could backfire by raising costs for consumers, reducing demand for cars and forcing automakers to lay off workers.

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"The correlation between a decline in vehicle sales in the United States and the negative impact on our workforce here, which, in turn threatens jobs in the supply base and surrounding communities, cannot be ignored," GM said. "Alternatively, if prices are not increased and we opt to bear the burden of tariffs or plant moves, this could still lead to less investment, fewer jobs, and lower wages for our employees."

Important parts of the Republican base are revolting over Trump's decision to launch an investigation that could lead to a 25 percent tariff being imposed on foreign-made cars, trucks and auto parts on the grounds that the imports endanger U.S. national security.

A steady stream of counterarguments from business and farm group this week has provided a clear indication that Trump's plan to score political points by imposing the duties ahead of the midterm elections risks becoming a political liability.

The U.S. Chamber of Commerce criticized the administration for what it described as an abuse of the Section 232 provision of the 1962 Trade Expansion Act, which authorizes the president to curb imports if they are found to pose a national security threat.

“This is an inappropriate and unlawful use of this statute,” the leading business group said in comments filed Thursday night. “It is the Chamber’s view that the executive’s Section 232 authorities should not be abused in this way, and doing so only encourages other nations to raise their own trade barriers against U.S. exports in the name of national security."

The United Automobile Workers union offered general support for the probe, but steered clear of endorsing steep tariffs. It called for "targeted measures" to help the auto sectors, but also urged the administration not to take steps that could worsen things for automakers.

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"The automotive industry is a global industry with long, complicated supply chains. We caution that any rash actions could have unforeseen consequences, including mass lay-offs, for American workers," the union said.

Commerce Secretary Wilbur Ross said the administration welcomed all the input as it weighed what steps to take.

“We have received approximately 2,500 comments already and expect more by the midnight deadline tonight," Ross said. "The purpose of the comment period and of the public hearing scheduled for July 19 and 20 is to make sure that all stakeholders’ views are heard, both pro and con. That will enable us to make our best informed recommendation to the president.”

Trump has already used the authority to impose tariffs on steel and aluminum imports, prompting the European Union, China, Mexico and Canada to retaliate or prepare retaliation by raising duties on exports from the United States.

Earlier this week, a group of U.S. steel importers filed a lawsuit challenging the constitutionality of the trade law provision, which took effect 56 years ago but has been used by presidents only sparingly — until Trump took office and took it up as a main weapon in his quest to rebalance the United States' trade relationships.

The administration’s own comments, the Chamber added, make clear that the intent of the auto probe is not to protect national security but to gain leverage in NAFTA negotiations with Canada and Mexico and in ongoing trade discussions with Japan and the EU, which have not coalesced into formal negotiations.

"The breathtaking leap of logic required to recommend tariffs on imported automobiles and parts due to their threats to national security suggest that the only plausible reasons for this action are either economic protectionism in violation of our WTO commitments or a negotiating tactic," U.S. Wheat Associates said in comments to Commerce. "Use of this statute as a negotiating tactic is an abuse of the authority granted by Congress."

Other business groups, including the National Association of Manufacturers and the Organization for International Investment, also have come out strongly against the proposed trade restrictions, which could raise the price of a $30,000 car by more than $6,000. They warned the tariffs would disrupt global supply chains that make North America competitive with Europe and Asia in car production.

“The increased cost to manufacture vehicles and some major automotive parts in the United States will reduce export opportunities for automotive and other manufacturers in the United States as foreign producers will not face similar cost increases,” NAM warned. “In addition, it is expected that automobiles and automotive parts would face foreign retaliatory action in the form of new tariffs on U.S. exports, further curtailing domestic production and job opportunities.”

The nation's largest farm group, the American Farm Bureau Federation, reminded the administration that many farmers have already been whacked by retaliation against Trump's steel and aluminum tariffs, and that further pain is coming as a result of a separate dispute with China, where each side is posed to impose tariffs on $34 billion of each other's goods one week from now.

"Farm Bureau urges our trade officials to engage in discussions to resolve trade concerns before resorting to tariffs," the group said. "Tariffs targeting the many countries that export automobiles and automotive parts will potentially result in extensive additional retaliation against U.S. agricultural exports by tariffs and other restrictions."

U.S. Wheat Associates noted that wheat growers have largely escaped the retaliation that has hit agricultural producers to date, but predicted that would change if Trump imposes duties on foreign automobiles because the U.S. imports automobiles from a number of important markets for American wheat, like Mexico, Japan, South Korea and the EU.

The Commerce Department initiated the investigation into imports of foreign cars, trucks and auto parts in May. It has up to 270 days to complete the investigation, but Ross has said it could wrap up much faster than that.

Freedom Partners and Americans for Prosperity, two groups closely aligned with conservative tea party Republicans, filed a joint statement that urged Commerce to reject tariffs on automotive imports.

"Under President Trump’s leadership, the economy is flourishing. Unemployment is at record lows, wages are growing. Consumer confidence is also on the rise," the statement said. "The one caveat to this good news is that consumers are less enthusiastic about the economy’s future due in part to concerns over an escalating trade war."

Not surprisingly, foreign automakers who would be on the receiving end of the potential new duties also came out swinging and highlighted the likelihood that U.S. job losses could be the end result of Trump's planned action.

The Japan Automobile Manufacturers Association, which represents Honda, Toyota, Mazda and other Japanese brands, warned the tariffs would have a damaging effect on the U.S. economy and consumers.

“Tariffs on imported automobiles and automotive parts would have a serious negative impact on American families and jobs," the group wrote. "Studies estimate that tariffs could increase the price of an imported $30,000 car by about $6,400 and cause up to 195,000 U.S. workers to lose their jobs."

They also noted that Japanese vehicle exports to the United States “have been cut in half from the mid-1980s. This has been matched by a ten-fold increase in U.S. production of Japanese-brand vehicles since the mid-1980s, to nearly 3.8 million U.S.-built vehicles in 2017. As of 2017, JAMA members have cumulatively invested over $48 billion into their 24 manufacturing facilities throughout the U.S.”

Japanese-brand manufacturers currently employ more than 92,000 American workers and their presence in the United States helps the U.S. auto industry remain competitive globally, the group said.

German car manufacturer Daimler, which makes Mercedes, also warned that tariffs would backfire on U.S. consumers and noted that it has invested $12 billion in the state of Alabama in recent decades to make its cars in the U.S.

New tariffs on vehicles and parts “could have a devastating impact on American workers” and be felt through the U.S. economy in terms of higher auto prices, fewer auto sales, reduced vehicle choice, auto industry job losses and lower freight volumes for port, rail and trucking interests, Daimler said.

It would even impact the affordability and availability of car-sharing in major U.S. cities by making the services more expensive, the German manufacturer said.

The United Steelworkers union has been a rare voice of support for the investigation. But the comments it filed with Commerce urged the Trump administration to exempt Canada from any new tariffs while it goes after other suppliers in China, Mexico, Japan, South Korea and Germany.

“Countries of concern should be our principal interest, as well as ensuring that we have the capacity, in terms of development and production, for key enabling technologies and productive capacity to meet the needs of our defense sector,” the union said.

As of Friday morning, over 2,000 comments had been received, many from ordinary Americans, including Ray Jones of Mena, Ariz.

“This is a policy from a president who is totally clueless as to the effects of unnecessary tariffs. This tariff has NO bearing on national security and will only hurt us, the voters,” Jones wrote.

A review of the submissions found few comments in support of the administration's probe, though some expressed sympathy for either the Trump administration or the impulse behind the investigation.

“We need to close the deficit and the only way is by being fair to United States and the hell with the other countries,” one person wrote in an anonymous comment. “They don't worry about us when they put 25 percent [tariffs] on our products [going] their way but they don't want to have a fair trade.”

“Dear Trump administration,” another person who commented, giving their name only as Cory, wrote. “I'd like to start out by saying I think you're doing a great job in office so far, I really do. However, one thing I currently disagree with is this [potential] 25 percent tariff on imported auto parts.”

Scores of classic car enthusiasts also expressed concern that used cars and parts could be hit with steep new duties.